Why Equal Pay for Equal Work Won't Cut It

Lilly Ledbetter takes the stage during day one of the Democratic National Convention at Time Warner Cable Arena on September 4, 2012 in Charlotte, North Carolina.National Journal

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While Democrats on Capitol Hill push the Paycheck Fairness Act, crowing about "equal pay for equal work," a popular theme for this fall's midterm elections, the party's rhetoric glosses over a much larger problem. The real issue is not just that women make less than men who are working in similar positions, but that women are massively underrepresented in the country's highest-paying jobs. And it's unclear if there's anything Congress can do about it.

Many of the statistics being tossed around in the income-inequality arguments on Capitol Hill speak to a deeper problem, one that won't be solved by Democrats' Paycheck Fairness Act or the Lilly Ledbetter Fair Pay Act they passed in 2009. Neither plan does anything to solve the real problem in wage disparity between men and women.

Republicans, for example, are hammering the White House for paying women 88 cents for every dollar they pay their male employees. But, the White House argues, Republicans are comparing apples to oranges. Women in the most senior White House positions make more than their male colleagues, but there are many more women in less senior (and lower-paying) White House jobs who are bringing down the average.

The White House has faced plenty of criticism for the lack of gender diversity in senior positions, something the administration has worked hard to reverse over the past few years. But the gap remains, and the White House is hardly the only culprit.

There are just 23 female CEOs in the Fortune 500 (still, it's an increase from zero in 1995). In Washington, only 22 percent of nonprofit executives are women, according to our own National Journal survey. The median income for those women is about $60,000 (or 15 percent) less than for male nonprofit executives in D.C. Meanwhile, female chief executives in general make about 20 percent less than their male counterparts, according to a study from the Institute for Women's Policy Research released this month.

The IWPR study shows that men are much more likely to hold high-paying positions than women in general. In seven of the top 20 most common occupations for men — including chief executives, software developers, general and operations managers, sales representatives for wholesalers and manufacturing, police officers, accountants and auditors, and managers — men earn more than $1,000 per week. For women, there are only four in the top 20 that pay so well.

Only one of the high-paying jobs among the top 20 most common occupation categories for men appears in the top 20 for women: accountants and auditors, where 62.3 percent of workers are female. It represents the seventh most common occupation among women and the 17th among men. Meanwhile, the most common occupation for men is "manager," while for women that is only the ninth most common job title.

Among the top 20 most common occupations for men and women, men earn an average median income of $938 per week, while women earn $702.

At the same time, women are increasingly dominating in preparation for higher-wage work. They've been earning more bachelor's degrees, master's degrees, and doctorates than their male counterparts for years (women began earning more bachelor's degrees than men back in 1982, master's degrees in 1987, and doctorates in 2006), according to data from the Education Department.

But that level of preparedness has yet to translate into higher wages and better jobs for women on the whole. House Minority Leader Nancy Pelosi argued last week that it may just be too early to see a change, but acknowledged that Democratic proposals moving through Congress right now do little to address the larger issue.

"We're not talking about women making less because they're doing different jobs. We're talking about them doing the same jobs in that particular instance [with the Paycheck Fairness Act]. But we certainly have to raise the possibilities for women in corporate America and entrepreneurship and risk-taking in terms of small businesses and the rest," Pelosi said when asked about the gender gap in high-paying positions.

The Democratic leader pointed to legislation from the House Small Business Committee, which would address a small fraction of that gap. Rep. Nydia Velázquez, D-N.Y., introduced the bill in committee last June that would require the federal government to give preference to "economically disadvantaged women-owned small business[es]" as well as "women-owned small businesses in substantially underrepresented industries," when handing out contracts.

The private sector is more difficult, Pelosi acknowledged, but emphasized that changing the rhetoric about women working in "what used to be considered nontraditional occupations which have paid higher," can be a good first step.

She also pointed to Janet Yellen taking over the Federal Reserve Board, the first woman ever to head the country's central bank, as a model, recalling that at a meeting with leaders on Capitol Hill last month, Yellen credited much of the economic success of the 20th century to greater workforce participation by women, particularly in senior positions.

"Women still remain underrepresented at the highest levels in academia, in government, and in business. There are doubtless numerous reasons for this, and in fact economists themselves are among those engaged in trying to understand the factors that explain why more women aren't rising to higher levels," Yellen said. "I hope we continue to seek this understanding, in my field and others where women are in the minority, because the benefits of greater participation for women, it seems to me, are clear and substantial."

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